State ex rel. Office of the State Eng'r v. Romero
| Decision Date | 26 September 2022 |
| Docket Number | S-1-SC-37903 |
| Citation | 521 P.3d 56 |
| Parties | STATE of New Mexico EX REL. OFFICE OF THE STATE ENGINEER, Plaintiff-Respondent, v. Toby ROMERO, Defendant-Petitioner, and Elephant Butte Irrigation District et al., Defendants. |
| Court | New Mexico Supreme Court |
Domenici Law Firm, P.C., Peter V. Domenici, Jr., Reed C. Easterwood, Albuquerque, NM, for Petitioner
New Mexico Office of the State Engineer, Gregory C. Ridgley, General Counsel, Richard Arthur Allen, Deputy General Counsel, A. Nathaniel Chakeres, Deputy General Counsel, Santa Fe, NM, Martha Clark Franks, Special Assistant Attorney General Fort Collins, CO, for Respondent
{1} According to our Constitution and our courts, beneficial use of water is "the basis, the measure and the limit" of a continued water right. N.M. Const. art. XVI, § 3 ; State ex rel. Reynolds v. S. Springs Co ., 1969-NMSC-023, ¶ 15, 80 N.M. 144, 452 P.2d 478. With that in mind, we answer whether an owner of a groundwater right may forfeit part or all of a claimed water right and whether any use, no matter how small, preserves the right to the whole. Petitioner Toby Romero argues that his use of three acre-feet per year of water preserves the claimed 394.85 acre-feet per year water right. Synchronizing the legislative relationship and legal history of groundwater and surface water forfeiture statutes with a plain reading of our Constitution supports only one conclusion: New Mexico's groundwater forfeiture statute allows for partial forfeiture. See NMSA 1978, § 72-12-8(A) (2002) (groundwater forfeiture); NMSA 1978, § 72-5-28(A) (2002) (surface water forfeiture). Accordingly, we conclude that substantial evidence supports the special master's findings of nonuse by Petitioner resulting in forfeiture. The Court of Appeals interpretation of the groundwater forfeiture statute is affirmed, albeit for different reasons. See State ex rel. Off. of State Eng'r v. Romero , 2020-NMCA-001, 455 P.3d 860.
{2} The issue on appeal results from an order in the Lower Rio Grande Adjudication where the Office of the State Engineer (OSE) denied Petitioner's claim of ownership over a water right associated with "railroad operations" (Railroad Right) in the now-defunct town of Cutter.1 The town of Cutter was established in the late nineteenth century as a mining community. A railroad depot was built around 1880 to facilitate the shipping of ore and cattle. The railroad depot's well (Well) was initially used to supply water to steam engines that powered the trains and was also used to water a local commodity, livestock. Soon after the mines shut down, the railroad depot shut down, and the need for the railroad to use the Well to service the steam locomotives diminished. The railroad's Well use eventually ended in 1960. Soon thereafter, the town of Cutter itself ceased to exist.
{3} In 1994, the railroad conveyed a parcel of land to Petitioner that included the Well and the water rights associated with the Well.2 Four years after the railroad's conveyance, Petitioner filed a declaration of water right with the OSE claiming 394.85 acre-feet of groundwater per year for both "railroad and livestock purposes." His calculation of the Railroad Right was based on the "maximum amount of railroad traffic" passing through Cutter during the "peak" of the railroad's operation in 1944. This calculation was grossly different from a hydrographic survey of the Lower Rio Grande Basin conducted three years later, which calculated the Well's usage as three acre-feet per year for livestock watering.
{4} While awaiting judgment on the Railroad Right, Petitioner was joined in the Lower Rio Grande stream adjudication in 2007. After Petitioner was joined in the stream adjudication but before he received the OSE decision, he attempted to market the Railroad Right in 2009 to the Spaceport America Project and submitted an application to the OSE for change of water usage. The OSE did not reply to his application, and Petitioner eventually withdrew it. In June 2010, Petitioner received an offer of judgment from the OSE finding that Petitioner had no water right.
{5} Petitioner rejected the OSE offer of judgment, and a hearing was set before a special master to determine what water right, if any, Petitioner had. The special master calculated the Railroad Right at 107.53 acre-feet per year and found evidence to support three acre-feet per year usage of water for livestock purposes based on the hydrographic survey and witness testimony. Regarding the use of the water at issue, the special master made two findings. First, "water from the Well was not used between 1960 and June 1, 1965 for any purpose other than to water livestock." Second, "The fact that the Railroad Right was used to water livestock does not prevent forfeiture of the remainder of the right." Finding no evidence of water usage for railroad purposes during these same periods, the special master relied on a Utah case to construe New Mexico's groundwater forfeiture statute to allow for partial forfeiture.
{6} In reaching these findings, the special master relied in part on Petitioner's expert report, which confirmed that the steam locomotive era ended in 1955. Exhibits also demonstrated that the railroad company in this case had converted from steam to diesel by 1960 and in doing so had closed the Cutter train depot and removed its crews from Cutter. The railroad's "right-of-way map" depicted the Well as "retired in place" as of 1959. The State presented historical records suggesting that "1960 was the last year of regular main line, standard gauge steam operations in the United States." In addition, a witness testified to repairing the Well in the early sixties, "’60 to ’64," and stated that it had been "two or three years since it had been run." The witness remarked that the purpose of the repair was not to operate a steam locomotive but so the owner could "water some livestock that he had out there."
{7} Petitioner objected and filed a motion to set aside the special master's report and order recommending only the right to water livestock. He argued that although the water was not used for railroad purposes, it was used for livestock purposes and therefore that this partial use negated forfeiture of the larger Railroad Right. The core of Petitioner's argument is that usage of a three acre-feet per year livestock right preserved a right to seventy percent of his claimed 394.85 acre-feet per year Railroad Right. The district court reviewed the special master's recommendation and concluded that "substantial evidence supports the special master's finding" of nonuse. The district court also accepted the special master's interpretation of the groundwater forfeiture statute that allowed partial forfeiture.
{8} The Court of Appeals affirmed the district court, finding that the special master's reading of the groundwater statute was consistent with legislative intent, our Constitution, and our state's historic approach to the preservation of water, in particular the recognition of partial forfeiture. See Romero , 2020-NMCA-001, 455 P.3d 860. The Court of Appeals found the statute ambiguous because it "refers to forfeiture of ‘the water rights’ without specifying whether such forfeiture may extend to just a portion of an appropriator's water rights." Id . ¶ 21. We acknowledge that the statute's varying use of the terms "water," "waters," "water right," and "water rights," creates some ambiguity. See § 72-12-8(A). However, we conclude that analysis of the statute to resolve an ambiguity is unnecessary. These terms might refer to each water right by its individual purpose. Or the terms together might refer to a collection of the water rights related to an owner's water permit. We agree with the Court of Appeals that an analysis of legislative intent and history supports a finding that the groundwater forfeiture statute allows for partial forfeiture of water rights. See Romero , 2020-NMCA-001, ¶¶ 19-31, 455 P.3d 860. However, there is only one constitutionally valid interpretation of these water forfeiture statutes, and that is through the constitutionally acknowledged doctrine of beneficial use.
{9} The purely legal question, whether partial forfeiture exists in our Constitution or by statute, requires de novo review. State ex. rel. Off. of State Eng'r v. Elephant Butte Irrigation Dist. , 2012-NMCA-090, ¶ 8, 287 P.3d 324 (citing City of Santa Fe v. Travelers Cas. & Sur. Co. , 2010-NMSC-010, ¶ 5, 147 N.M. 699, 228 P.3d 483 ). The OSE has "the supervision of the apportionment of water in this state." NMSA 1978, § 72-2-9 (1907), in this case in accordance with the groundwater and surface water forfeiture statutes. When, as here, "an agency decision is based upon the interpretation of a particular statute, the court will accord some deference to the agency's interpretation, especially if the legal question implicates agency expertise." Fitzhugh v. N.M. Dep't of Labor , Emp. Sec. Div. , 1996-NMSC-044, ¶ 22, 122 N.M. 173, 922 P.2d 555. However, the court is not bound by an agency decision and "may always substitute its interpretation of the law for that of the agency[ ] because it is the function of the courts to interpret the law." Id . (internal quotation marks and citation omitted).
{10} Finally, although this Court reviews the application of statutory provisions de novo, we review the special master's factual findings, which the district court accepted, for substantial evidence. See State ex rel. Reynolds v. Lewis , 1973-NMSC-035, ¶¶ 27-28, 30, 84 N.M. 768, 508 P.2d 577.
{11} The doctrine requiring beneficial use of water, which forms the foundation of this opinion, originates from territorial legislation. The 1907 water act provides, ...
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